Post by account_disabled on Mar 13, 2024 21:49:55 GMT -6
The in Slice Pizza Co in and sold his shares for a total of IDR one year later. To calculate the return on his investment he will divide the profit by the investment cost for an of or percent. With this information he can compare his investment in Slice Pizza with his other projects. Suppose Joe also invests IDR in BigSale Stores Inc. in and sold his shares for a total of IDR in . The on Joes ownership in BigSale will be IDR IDR or percent. See Limitations below for potential problems arising from contrasting time frames.
Return on Investment Is the Right Measure of Agency Success J. Fitzgerald Group Buffalo NY Limitations Buy Leads of Return On Investment Examples like Joes above reveal some of the limitations of using especially when comparing investments. Even though the on Joes second investment is twice that of his first investment the time between Joes purchase and sale was one year for his first investment and three years for his second investment. Joe can adjust the of his multiyear investments accordingly.
Since his total is percent to get his average annual he can divide percent by to get . percent. With these adjustments it appears that although Joes second investment generated more profits his first investment was actually the more efficient choice. can be used in conjunction with Rate of Return which takes into account the time frame of the project. One can also use Net Present Value NPV which describes the difference in the value of money over time due to inflation. calculating the rate of return is often called the Real Rate of Return. Return on Investment.
Return on Investment Is the Right Measure of Agency Success J. Fitzgerald Group Buffalo NY Limitations Buy Leads of Return On Investment Examples like Joes above reveal some of the limitations of using especially when comparing investments. Even though the on Joes second investment is twice that of his first investment the time between Joes purchase and sale was one year for his first investment and three years for his second investment. Joe can adjust the of his multiyear investments accordingly.
Since his total is percent to get his average annual he can divide percent by to get . percent. With these adjustments it appears that although Joes second investment generated more profits his first investment was actually the more efficient choice. can be used in conjunction with Rate of Return which takes into account the time frame of the project. One can also use Net Present Value NPV which describes the difference in the value of money over time due to inflation. calculating the rate of return is often called the Real Rate of Return. Return on Investment.